What is insurance? and how many types of insurance are there?

What is Insurance?

What is Insurance

What is Insurance? : Insurance is a kind of legal agreement between two parties, the first being the insurance company (the one who gives the insurance or the insurer) and the other is the individual (the one who takes the insurance or the insured).

In this, the insurance company promises that if some unforeseen or accidental event happens, then the company is going to take responsibility for everything. At the same time, all the things that may have been damaged will be completed by the company itself.

These types of events are called contingencies because there is no exact time for these events as to when they are going to happen. In this , the insurance company has to compensate for all the losses as promised earlier.

How many types of insurance are there – Types of Insurance in English.

Although there are many types of insurance, but here we will know about some important types.

1. Life Insurance

As the name suggests, in life insurance, your life is insured. You buy life insurance so that even if you are not there, your family is not dependent on anyone and you are financially secure yourself.

Life insurance becomes very important for those people when you are the only earner in your family and the whole family depends on you.

2. Health Insurance

Health insurance is taken to cover the cost of medical treatments. In this also there are many types of health insurance policies which cover different diseases and ailments.
You can also take a generic health insurance policy or you can also take a specific policy for any disease. The premium paid in this covers all types of treatment, hospitalization and medication costs.

3. Car Insurance –

Car Insurance in Hindi
Similarly , you can insure your car with Car Insurance . If any accident is to happen then you get compensation for it.

4. Education Insurance –

Education Insurance in Hindi
In this insurance, you are depositing money for the right education of your child and when the right time comes, you get a lumpsum amount for the education of your child.

5. Home Insurance

If you have built your house, then you must buy home insurance because if there is any damage to your house, whether it is fire, any natural calamity or anything else, you get your compensation in everything.

What tax benefits are also available by taking insurance?

There are other benefits of taking insurance except safety, security benefits. With this you also get tax benefits.

1. Life insurance premium that can be claimed up to ₹ 1.5 lakh as a tax-saving deduction under section 80C.

2. Medical insurance premium that also up to ₹25,000 for yourself and your family, while ₹25,000 for your parents, you can claim a tax-saving deduction under section 80D.

You have to e-filing these claims at the time of filing income tax returns.

How is Insurance Claim done?

Let us now know how you can claim your insurance amount.

1. For this you have to first make your claim against your insurance policy.

2. Now you have to provide all the details regarding your loss which you have suffered. It differs from insurance to insurance.

3. Then you have to submit all the bills / proof of your damage, loss, hospitalization , etc.

4. Now your work ends here, now the insurance company will verify your claim.

5. Whereas if your claim is proved to be true then you get your claimed amount, according to your loss.

Benefits of taking insurance / Advantages of taking insurance

By the way, insurance provides a lot of benefits to any individual, family businessman, businesses as well as society. At the same time, let us know about some of its important advantages: –

1. Insurance provides economic and financial protection, to the insured person or thing that has been insured, that too in a nominal amount called premium.

At the same time , it provides financial protection to the nominee if there is a pre-matured death of the insured person. Along with this, it also covers many losses such as loss of property due to theft, due to some fire or any natural calamity.

2. At the same time, it reduces the risks of people who otherwise could have caused big losses for them. Although it is not possible to completely remove the risks and uncertainties, but it can be reduced to a great extent. That’s why insurance companies charge you a small premium to earn your risks.

3. It helps in maintaining the standard of living of the people if there is such an unexpected loss. At the same time, it also protects us from unfortunate financial crisis .

4. Since we have to pay some premium in insurance, for which it encourages us to save. Due to which saving becomes a habit of ours.

5. It protects us from being dependent on someone else. So that you can live your life in your own way and empowers us. This life insurance policy provides us full financial support if someone dies.

6. It also helps in taking loan. If you have any policy going on then you can take loan from insurance company on the basis of that policy. In which this policy is kept according to the collateral.

7. It provides new employment opportunities for all. In this modern era, hundreds of entrepreneurs and thousands of employees are engaged in this line.

8. Promotes Foreign Trade. Insurance companies have a big hand in promoting the international trade of a country. Because by insuring the risks of these businesses are greatly reduced, so that they can do the desired export activities of their businesses.

9. Insurance companies have a big hand in operating the business smoothly. Because it divides the loss of properties. At the same time, the motivation of the employees is increased by getting the employees done through the insurance company.

10. It helps in reducing inflation . To reduce inflation, the amount of money has to be reduced. At the same time, taking money from insurance companies on the basis of premium helps in reducing inflation.

11. These premium amounts are spent in many development areas such as trade and industry. Due to which the economic growth of the country takes place.

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